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For years, Nigeria has pursued regional trade agreements with the promise of opening new markets for its manufacturers, farmers and exporters. From the ECOWAS Trade Liberalisation Scheme (ETLS) to the African Continental Free Trade Area (AfCFTA), the country has signed up to frameworks designed to make it easier for goods to move across borders and create opportunities for businesses beyond Nigeria’s domestic market. Yet, beneath the ambition lies a fundamental problem: Nigeria may have the goods and the agreements, but it does not have enough ships to move those goods.
Dangote recently disclosed plans to acquire its own vessel to transport cement and other industrial products to markets across West and Central Africa, citing Nigeria’s shortage of suitable export ships and high cost of moving goods by road through neighbouring countries.
Sada Ladan-Baki, Head of International Trade Export at Dangote Cement who made the disclosure recently at a seminar, decried that it was not possible to get a ship to take goods from Nigeria to Ghana.
That gap, according to a trade expert and former director general of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), John Isemede, is one of the often-overlooked weaknesses in Nigeria’s regional trade strategy. He argues that a country cannot fully benefit from regional commerce while depending heavily on foreign vessels to transport its imports and exports. With many ships leaving Nigerian ports empty or carrying empty containers after discharging imports, freight costs remain high, while Nigerian exporters struggle to compete in neighbouring markets.
Trade agreement without ships
The question is increasingly important as Nigeria seeks to position itself as a major hub for African trade. Trade agreements may remove tariffs and create preferential access, but the physical movement of goods still depends on roads, ports, logistics networks and, for maritime trade, vessels.
Isemede said Nigeria currently lacks the shipping lines and vessel capacity required to effectively drive regional maritime commerce.
In his view, this raises a larger question about how the country intends to maximise the benefits of ECOWAS and AfCFTA when it lacks sufficient indigenous capacity to move its own goods.
“Who can tell us the future of the AfCFTA project? Any hope without a ship to move our goods?” he asked.
For him, the problem is not simply about owning ships. It is about creating an ecosystem capable of supporting regional trade, from vessel ownership and shipbuilding to port infrastructure, cargo generation, financing and maritime skills.
Cost of depending on foreign vessels
The consequences of Nigeria’s limited shipping capacity are visible in the cost of moving goods in and out of the country.
Isemede, a recipient of Nigerian Shippers’ Council awards, attributed the high outward freight charges partly to the low volume of Nigerian exports. He explained that many vessels arrive carrying imported goods but leave Nigeria with little or no outbound cargo.
The empty return journey, including the repositioning of empty containers, adds to shipping companies’ costs, which are eventually transferred to Nigerian businesses.
“For lack of vessels, why are imports on CIF and exports on FOB? As long as we are at the mercy of foreign shipping owners, the fees are paid to agents operating here on behalf of the owners abroad, and freight charges are mostly in US dollars,” he said.
He noted that even exporters who choose Cost and Freight (CFR) arrangements may still incur additional charges through local shipping agents transferring freight payments to foreign shipping companies.
The result is a trade structure in which Nigeria remains heavily dependent on foreign shipping interests while its own exporters bear the cost.
Nigeria’s shipping industry
Nigeria’s current situation is particularly striking given the country’s history in shipping.
The Nigerian National Shipping Line (NNSL), established in 1957, was once a symbol of Nigeria’s participation in international maritime commerce. But after decades of operations, the company was eventually liquidated in 2003.
Isemede also recalled earlier operators such as Elder Dempster, African Ocean Line, Bulk Shipping Apapa and ECOMARINE, pointing to the gradual disappearance of shipping operators that once provided capacity for Nigerian and regional trade.
He also questioned what became of policies intended to encourage greater participation by developing countries in maritime transport, including the United Nations Conference on Trade and Development (UNCTAD) 40:40:20 cargo-sharing arrangement of 1986 and Nigeria’s cabotage regime.
The central question, he said, is whether Nigeria has succeeded in developing vessels capable of carrying its own imports and exports.
The ECOMARINE question
One of the initiatives Isemede believes deserves renewed attention is the ECOMARINE Shipping Line.
The regional shipping project was conceived to provide dedicated maritime services along the ECOWAS route after approval by the Heads of State.
Although the initiative failed to develop into the regional shipping solution originally envisaged, Isemede believes its collapse should prompt a review rather than abandonment of the idea.
“If that particular regional venture did not work, is it not time to consider setting up another dedicated line to service this important route?” he asked.
He argued that Nigeria and other West African countries do not necessarily need to individually finance entire fleets. Joint ventures, vessel-sharing arrangements and regional shipping pools could provide an alternative.
He also questioned the continued inactivity surrounding the proposed Ship Link Project, reportedly conceived more than two decades ago by chambers of commerce within the ECOWAS region with financial institutions in the sub-region.
For Isemede, initiatives such as these demonstrate that the idea of regional shipping capacity is not new. What has been missing is sustained implementation.
Ships need cargo too
But there is another side to the problem.
Even if Nigeria suddenly acquired a fleet of vessels, those ships would still need cargo to remain commercially viable.
Isemede acknowledged that the country’s low export volumes are a major part of the problem. If vessels cannot find sufficient cargo to carry out of Nigerian ports, shipping operators have little incentive to maintain dedicated outbound services.
“The challenge now is how do we increase our cargo outputs, as most ships sail out of our ports empty or carrying empty containers after discharge. The only way is to increase business by upscaling our local production,” he said.
This means Nigeria’s shipping problem is also an industrial-production problem.
The country needs to produce more goods, but not simply enough to satisfy its domestic market. It needs to develop production capacity capable of generating consistent export volumes to Ghana, Côte d’Ivoire, Benin, Togo and other regional markets.
In other words, ships alone will not solve the problem. Nigeria needs cargo; and cargo requires production.
Snake Island’s unfinished opportunity
This is where Nigeria’s shipbuilding potential becomes important.
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Isemede pointed to the Snake Island Integrated Free Zone (SIIFZ) as a possible centre for a new maritime industrial strategy.
Nigerdock at Snake Island was originally established by the Federal Government in 1986 as a shipyard, years before the area acquired Free Zone status. Shipbuilding, ship repair and offshore fabrication were therefore part of its original purpose.
Today, the facility retains significant ship-repair, dry-docking and marine-engineering capabilities. But Isemede believes its vessel-construction capacity could be strengthened and repositioned to serve Nigeria and the wider West African market.
He does not believe Nigeria should begin by attempting to build large ocean-going vessels.
Instead, the country could start with vessels that have immediate and identifiable demand, barges, tugboats, workboats, offshore support vessels and smaller coastal cargo vessels.
“First things first: develop the regional maritime business and the vessels will follow,” he said.
Infrastructure challenges
Turning that vision into reality, however, would require more than investors and shipyard space.
Shipbuilding is one of the most infrastructure-intensive industrial activities. Steel must be cut, shaped and welded into enormous structures, while heavy cranes, dry docks, slipways, fabrication workshops and specialised equipment must operate continuously.
Isemede identified unreliable power supply as one of the major obstacles to shipbuilding and heavy marine fabrication at Snake Island. Dependence on diesel generators increases operating costs and makes large-scale fabrication more difficult.
There are also shortages of marine-grade steel, specialised equipment and other components required for modern shipbuilding.
Nigeria equally needs more marine engineers, naval architects, certified welders and quality-control professionals capable of working to international classification standards.
Without these supporting industries and skills, shipbuilding could remain expensive and uncompetitive even if the physical shipyard exists.
The regulatory maze
Investors must also navigate Nigeria’s complex regulatory environment.
Shipbuilding and marine fabrication projects can involve several agencies, including the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Export Processing Zones Authority (NEPZA) and environmental regulators.
For investors, particularly international companies, uncertainty over approvals, land arrangements, concessions and free-zone incentives can increase the risks and costs of committing capital.
Isemede therefore stressed the need for a predictable regulatory environment and recommended thorough legal and financial due diligence for foreign investors considering projects within the Snake Island Free Zone.
Why Chinese investors matter
Despite these challenges, he sees an opportunity for Chinese investors to participate in Nigeria’s maritime industrial revival.
Snake Island’s location, proximity to Lagos, access to waterways and connection to West African shipping routes make it potentially attractive for marine industrial investment.
Isemede proposed joint ventures that would combine Nigerian resources and market access with Chinese shipbuilding machinery, technology and technical expertise.
Such partnerships could focus initially on offshore support vessels, tugboats, barges, coastal cargo vessels, offshore structures and ship repair.
Beyond shipyards, he sees opportunities to establish marine-industrial supply chains involving bonded warehouses, marine-steel processing, prefabrication workshops and assembly centres.
Training would also be critical, with investors encouraged to develop programmes for certified welding, hull construction, ship surveying and digital ship design.
Build the market before the bigger ships
Perhaps the most important lesson from Isemede’s argument is that Nigeria should not attempt to build a maritime industry from the top down.
The country does not necessarily need to begin with expensive ocean-going vessels. It could begin by identifying the goods that already move between West African countries and developing a reliable coastal shipping network around them.
Barges and smaller feeder vessels could transport containers and bulk cargo between Nigerian ports, neighbouring countries and coastal terminals.
As trade volumes increase, demand for locally built vessels would also grow.
That would create a cycle: more regional trade would create demand for vessels; demand for vessels would support shipbuilding; shipbuilding would create jobs and industrial activity; and a stronger shipping industry would make regional trade cheaper and more efficient.
From agreements to action
The broader issue, therefore, goes beyond shipping.
Nigeria’s trade ambitions are being tested by the gap between policy and physical capacity. Signing trade agreements can open markets, but it does not automatically create the roads, ports, ships, factories and logistics systems required to serve those markets.
For a country seeking to become a major player in AfCFTA and West African trade, the question is no longer simply how many agreements Nigeria has signed.
It is whether Nigerian businesses have the capacity to take advantage of them.
A regional maritime cluster centred around Snake Island and other maritime Free Zones could bring together shipbuilding, ship repair, steel fabrication, coastal shipping, logistics, marine training and maritime finance.
The proposed development of the new Snake Island Port, including its planned 910-metre quay designed to accommodate deep-sea vessels and barges, could further strengthen the case for an integrated maritime hub.
But the opportunity will remain largely theoretical unless Nigeria tackles the underlying problems of infrastructure, financing, regulation, production and cargo generation.
For Isemede, the prescription is simple: build the market, build the infrastructure and build the vessels.
Only then, he argues, can Nigeria hope to turn its regional trade ambitions from agreements on paper into goods moving across West Africa.
